The following table lists 10 costs commonly incurred by manufacturing firms.
Cost # Description of Cost
1 Cost of raw materials used
2 Electricity used to operate machines
3 Cost of packing materials
4 Equipment maintenance
5 Janitorial supplies used to clean the factory
6 Cost of human resources department
7 Cost of purchasing department
8 Sales commission paid
9 Travel expenses for sales persons
10 CEO salary

Required:
a. For each cost, identify and justify the underlying activity whose volume determines the amount incurred for that cost. That is, what activity, if any, makes the cost variable?
b. Is there one activity that “stands out?” Does this help us understand why organizations often use sales or production levels to assess cost variability?